All posts by team

In The News: Blackstone-KKR Hidden Hand in Ad Blitz Unleashes Washington Fury (Bloomberg)

Confronted with the rare prospect of defeat on Capitol Hill, private equity titans Blackstone Group Inc. and KKR & Co. unleashed a national advertising blitz last year against legislation that threatened their investments in health-care companies valued at $16 billion … House Financial Services Committee Chairwoman Maxine Waters has already said she plans to hold a hearing early this year featuring executives from top firms. Meanwhile, progressive groups such as Americans for Financial Reform and United for Respect are funding anti-private equity campaigns.

In The News: This was supposed to be the decade of tougher consumer protections. That didn’t happen. (CNBC)

“The biggest concerns that we see with the CFPB today is they are holding the hands of the payday lenders,” said Linda Jun, senior policy counsel at Americans for Financial Reform. “That means that the debt trap will continue and people will continue to lose their cars and their bank accounts as a result of the continued destruction of payday loans.”

A Wall Street street sign

News Release: Report Highlights Private Equity Ownership of Texas Plant as Possible Danger to Health, Environment

Following last month’s explosions at a petrochemical plant near Beaumont, Texas on the Gulf Coast, a new report draws attention to the private equity industry’s growing control of companies in this sector through a business model that may increase health, environmental, and safety risks. This financial engineering often allows private equity firms to extract wealth from the companies they purchase, but can result in intense pressure to cut costs, resulting in layoffs or reduced spending on operations that can lead to substandard products or services.

fence with a yellow sign that says 'danger' = Photo by JF Martin on Unsplash

Report: Private Equity’s Chemical Catastrophe in Texas

The day before Thanksgiving, a chemical plant operated by the TPC Group exploded in Port Neches, Texas spewing contaminants, forcing over 50,000 people to evacuate, and leaving the community with the lingering aftereffects of an industrial disaster. The TPC Group is owned by two private equity (PE) firms, SK Capital Partners (SK) and First Reserve. The private equity owned chemical plants in Texas held by SK Capital have a long record of environmental violations — not just the TPC Group factories but other SK Capital portfolio firms.

In The News: Where have all the CFPB fair-lending cases gone? (American Banker)

“They’ve made it easier to hide patterns of discrimination by raising the threshold for reporting, which makes it harder for civil rights lawyers or state attorneys general to draw conclusions when the data is not available,” said Linda Jun, senior policy counsel at Americans for Financial Reform, a nonprofit coalition. “So in addition to not going after any bad guys in two years, they are making it a lot harder to find those patterns of discrimination.”

Letter to Regulators: AFR Ed Fund Opposes Elimination of Derivatives Risk Controls

We strongly oppose the proposal to remove requirements to post initial margin when engaging in inter-affiliate derivatives transactions with covered swaps entities. The Agencies instituted this requirement just four years ago, concluding that these margin postings were necessary to “protect the safety and soundness of the covered swap entity in the event of an affiliated counterparty default”. Since this issue affects the key depository affiliates of the largest U.S. banks – entities at the heart of the taxpayer-supported safety net for systemically critical banks – the 2015 Final Rule also concluded that failing to require initial margin for inter-affiliate swaps would pose a threat to broader systemic stability.

In The News: How to Buy a Regulation in Six Short Months (The American Prospect)

Under the rule, a borrower would have to sign a notice authorizing the lender to withdraw from the account after those two consecutive failures. “If I was smart, I would only sign that if there was money in there,” says Linda Jun, a policy counsel with Americans for Financial Reform, a regulatory and consumer protection coalition. “Aside from getting charged more for a negative balance, banks close bank accounts over this stuff, you could lose access to banking entirely.”